IMPORT SAMPLE REQUIREMENT GUIDE

Created February 26, 2015 Updated May 12, 2015

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TABLE OF CONTENTS

Introduction……………………………………………………………………..... 3 Types of Samples………………………………………………………………… 4-5 Valuation of Samples…………………………………………………….………. 6 Non-Mutilated Samples………………………………………………………...... 7 Mutilated Samples…………………….…………………………………………. 8-9 FTC Marking Requirements of Samples…………….………………….……….. 10 Supplemental Invoices……………………………….………………….……….. 11

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INTRODUCTION U.S. Customs and Border Protection has issued specific requirements covering the shipping and valuation of samples used for inspiration, design and sales. These requirements must be followed when shipping samples to Urban Outfitters, Inc. (URBN) to ensure the proper duty is paid, or, in the case of mutilated samples, that the goods meet U.S. Customs requirements for duty free treatment. URBN Production will request different types of samples throughout the development process, as well as after a style has been adopted for production. The type of sample sent will determine whether or not the sample should be mutilated and whether or not URBN will be issued a request for payment for charges related to the development of the samples. The types of samples and whether they should be mutilated are indicated below. Mutilation of samples enables URBN to make entry of the samples under classification 9811.00.60 of the U.S. Tariff, which allows for duty free treatment of properly mutilated samples. Not following these instructions could lead to payment of duties and/or penalties levied against URBN. Please note that chargebacks will be issued for non-compliance with the requirements set forth in this document.

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TYPES OF SAMPLES The following is a list of the different types of samples and whether or not they should be mutilated. Please note that the cost of the actual samples is not to be added to the FOB price of bulk orders – invoices for payment of actual samples should continue to be sent to URBN. The only supplemental invoices should be design and development costs for dropped styles. Type of Sample Proto sample/Finalization Sample Fit Sample REF Fit sample / PreProduction (PPS) Wear Test Sample

Mutilate (Yes or No) Yes Yes Yes Yes / No for Footwear

Tailoring Body Sample

Yes

Top of Production (TOP)

Yes

Salesman Sample (SMS) E-Commerce SMS Photo/Catalog/ Web Samples Investment Review Samples Press Samples Handbags - ALL

No No No No No Yes

Types of Samples - Definitions Proto Sample / Finalization Sample Factory produced sample used in finalization meetings to establish a buy. Fit Sample Sample used to finalize fit of bulk production REF Fit Sample / Pre-Production (PPS) Sample used for final look before approving for bulk cutting Wear Test Sample Sample used to test fabric, color properties or general wear and tear Tailoring Body Sample Sample used to test a new fabric and see drape and fit properties Page 4

Top of Production (TOP) Sample submitted by factory for approval to ship bulk order Salesman Sample (SMS) For wholesale business channel, samples to sell line. Should not be mutilated. E-Commerce SMS For wholesale business channel, colors that did not originally get sent as SMS. Should not be mutilated. Photo/Catalog/Web Sample Samples used in photo shoots for web and catalog. Should not be mutilated. Investment Review Sample Samples used in seasonal ‘investment review’ product review meetings. Should not be mutilated. Press Sample Samples for events and give aways. Should not be mutilated.

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VALUATION OF SAMPLES When samples are shipped to the U.S., whether URBN is charged for them or whether they are supplied free of charge, the value on the shipping/clearance invoice must be accurate for U.S. Customs entry purposes. Non-mutilated samples must indicate the value of the goods (1.5x or 2x FOB value of goods, depending on discussions with URBN Production). If URBN is not paying for the samples, they should be valued at the price to acquire or produce the sample. A nominal (low) value is unacceptable for U.S. Customs purposes. Mutilated samples are to be valued the same as if they were not mutilated. As noted above, a nominal value is unacceptable for U.S. Customs purposes. Even though properly mutilated samples will be entered as duty free, U.S. Customs still expects them to be valued correctly. URBN Global Trade and Compliance will audit incoming samples and invoices to ensure the correct value is indicated on all commercial documentation. Vendors who do not indicate the correct value for either mutilated or non-mutilated samples may be issued a chargeback.

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NON-MUTILATED SAMPLES U.S. Customs does not consider items that are not mutilated to be “samples”. Therefore, the shipment is treated exactly the same as a production/bulk shipment. The following sample types should not be mutilated: -

Salesman Samples (SMS) E-Comm SMS Samples Photo Samples/Web Samples/Catalog Samples Press Samples Investment Review Samples

The shipping/clearance invoice must include the following: -

URBN style # for any non-mutilated sample Complete description (including product type, gender, fiber content, etc.) # of units Accurate value Country of Origin Actual Manufacturer name and address

Please note you may send mutilated and non-mutilated samples in the same courier shipment. However, if you send mutilated and non-mutilated samples to URBN in the same box, on the same airway bill, you must include a separate invoice for the mutilated items and one for the non-mutilated items.

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MUTILATED SAMPLES The following sample types should be mutilated: -

Proto Samples / Finalization Samples Fit Samples REF Fit Samples / Pre-Production Samples (PPS) Size Set Samples Wear Test Samples Tailoring Body Samples Top of Production (TOP) Samples All Handbags All Footwear, except Wear Test

SAMPLE GARMENT MUTILATION There are two methods to properly “mutilate” a garment. Regardless of which procedure is used, the indelible marking or the perforation must be considered readily visible in the event that the garment is worn. Mutilating or marking an inseam, shirt-tail or other non-conspicuous or "invisible" feature is not acceptable. 1. A section may be cut or torn from the main body of the garment. This cut must be on the outside of the garment, visible when worn, and should not be on a seam or border. The size of the cut or tear should be at a minimum of 2 inches (5 cm) in length.

This is properly mutilated right between the shoulder blades. Easy to see and is a 2” tear.

This is properly mutilated right on the seat of the pants. Easy to see and is a 2” tear.

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2. The item may be marked with the word “SAMPLE” in indelible ink or paint. The size of the word “SAMPLE” should be a least 1-inch (2.5 cm) in height and not less than 2 inches (5 cm) in length, placed in a prominent area that will be visible when the garment is worn.

This is properly marked, right between the shoulder blades of the garment. It is easy to see in large, contrasting, indelible letters.

This is properly marked, right on the seat of the pants. It is easy to see in large, contrasting, indelible letters.

SAMPLE HANDBAGS/TOTES There are 2 methods that can be utilized to mutilate handbags & totes. 1. At least a 2” cut or tear anywhere on the outside of the bag. 2. Be marked with the word “SAMPLE” in indelible ink at letters at least 1 inch high and 2 inches long anywhere on the outside of the bag.

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SAMPLE FOOTWEAR There are 2 methods that can be utilized to mutilate footwear. 1. Drill a ¼” hole through the sole. 2. Be labeled with the word “SAMPLE” in indelible ink at letters at least 1 inch high and 2 inches long on the outside of the shoe and be readily visible. SAMPLE FABRIC MUTILATION Fabrics in continuous lengths or rolls not exceeding two (2) yards may be marked or perforated with the word “SAMPLE” at intervals of one-half yard for the entire length. The size of the word “SAMPLE” should be at least one (1) inch high and not less than five (5) inches long and be placed at a perpendicular angle across the fabric. The word “SAMPLE” must be on the face or front of the fabric and in a contrasting color. Fabrics samples over two yards in length must be entered normally.

FABRIC SWATCHES A section or hole at least one (1) inch in diameter may be cut in the main body of the fabric swatch if it is at least 8 inches by 8 inches. Alternatively, the swatch may be marked with the word “SAMPLE” in indelible ink at letters at least 1 inch high and 2 inches long. Swatches smaller the 8 inches by 8 inches need not be cut or marked. TRIM CARDS Trim cards do not need to be mutilated as they contain only small pieces of materials for the development and solicitation of orders. PARTS OF GARMENTS Parts of garments should also be mutilated so as not to have to pay duty when imported.

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SAMPLE CLEARANCE/SHIPPING DOCUMENTATION Mutilated Samples The shipping/clearance invoice for mutilated samples must include the following information: • • • • •

URBN style # for Development or Salesman Samples, URBN PO # for TOP Samples Complete description (including the fiber content) Quantity of samples Accurate value as described previously If properly mutilated, the below statement must be indicated in Bold Font under the commercial invoice description:

“Mutilated Samples – 9811.00.60” Non-Mutilated Samples The shipping/clearance invoice for non-mutilated samples must include the following: • • • • • •

URBN style # for any non-mutilated sample Complete description (including product type, gender, fiber content, etc.) # of units Accurate value Country of Origin Actual Manufacturer name and address

Please note if you send mutilated and non-mutilated samples to URBN in the same box, on the same airway bill, you must include a separate invoice for the mutilated items and one for the non-mutilated items.

Federal Trade Commission (FTC) Marking Requirements of Samples The Federal Trade Commission (FTC) requires Country of Origin (COO), as well as fiber content and manufacturer identification/RN number information on textile apparel products including samples. Please be advised that the FTC requirements will be met even if the required information (country of origin, fiber content, RN) is found on a hangtag attached to the garment rather than on sewn-in labels. There are no exceptions to these requirements. All vendors must comply to ensure that URBN is meeting U.S. government regulations for the importation of samples.

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SUPPLEMENTAL INVOICES Supplemental invoices are only to be submitted to URBN for payment if and when a developmental style is dropped. If a style is adopted, all development costs including sample costs, sample yardage, materials, setup fees, freight charges, surcharges, etc. are to be incorporated into the FOB price to be paid to the vendor. No supplement invoices will be paid for charges associated with a production order. If a style is dropped, any supplemental invoices for development charges must include the following information, along with any e-mail correspondence related to the dropped style: • • • • •

URBN Brand Name URBN style # Full description of the charge Quantity Amount

Invoices for payment of previously shipped samples may be sent to URBN, per discussions with Production as to which samples will be paid for. Charges for samples should not be rolled into the FOB costs of production orders, as that will lead to duplicate payment of duty.

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